Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise.

Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses?

Expert Solution

Factors which business will be likely to report in order to discount the cash flows to work out how much needs to be adjusted to label their current losses are as follows-

A.the farm need to re adjust the growth projection and it will help the company in order to adjust the cash flows of the future.

B. The company also needs to readjust the discounting rate so that the company can readjust the cash flows accruing in the future

C. The company should also be trying to ascertain higher rate of discounting into the cash flow projection so that the negative cash flow can be factored into the overall future of the company.

D. The company should also be trying to discount the risk exposure which are mostly macro is into its overall cash flow projection.

E. The company should also be trying to allot a higher rate of default in his overall valuation techniques so that negative cash flow could be discounted

jeff jeffy answered 1 year ago

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses?

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses? Further Instructions: Generally, I expect to see ‘some kind’ of formula or...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses?

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses? Further Instructions: Generally, I expect to see ‘some kind’ of formula or...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all industries across the board and offset the economic damage unleashed by the 3-month long coronavirus [COVID−19] crisis episode, and indeed, keeps its promise. Required: By approximately what factor [in the long-run] are businesses likely to discount their negative cash flows, to work out how much is needed to level their current losses? Further Instructions: Remember, this is an essay question, so, please feel free...

When the U.S. Government proposes a fiscal stimulus package during a recession there is usually a...

When the U.S. Government proposes a fiscal stimulus package during a recession there is usually a debate in Congress as to whether the Government should: 1) increase spending directly such as building bridges and schools; or 2) reduce personal income taxes. Using the concepts of U.S. GDP accounting based on the expenditure approach: (p. 749 ch 30) Explain why each of the two options would have a different initial impact on U.S. GDP How could the positive expenditure impact on...

1. The Federal Government distributed a recovery relief fund to all households with $600 for all...

1. The Federal Government distributed a recovery relief fund to all households with $600 for all individuals filing and $1,200 for all households filing jointly and $500 for each children in each household. This was part of the $2.2 Trillion stimulus package under CARES Act of March 2020 that also included employee job protection plan for small business owners and restaurants, travel related businesses, unemployment insurances and households with no taxes filed. What would be the overall impact on AD...

The Federal Government distributed a recovery relief fund to all households with $600 for all individuals...

The Federal Government distributed a recovery relief fund to all households with $600 for all individuals filing and $1,200 for all households filing jointly and $500 for each children in each household. This was part of the $2.2 Trillion stimulus package under CARES Act of March 2020 that also included employee job protection plan for small business owners and restaurants, travel related businesses, unemployment insurances and households with no taxes filed. What would be the overall impact on AD of...

Suppose the government proposes austerity measures that induce a larger reduction in public goods. We are...

Suppose the government proposes austerity measures that induce a larger reduction in public goods. We are going to use our standard one-period model to address the effects of this shock. Let a representative consumer maximize utility which is a function of consumption, c, and leisure, l. The consumer earns a wage rate, w, receives profits, π, and pays a lump sum tax T. They are endowed with a maximum of h units of time. A representative firm maximizes profits by...

Question

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Solutions

Expert Solution

Related Solutions

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

Suppose the government proposes a relief package in an urgent attempt to bail out virtually all...

When the U.S. Government proposes a fiscal stimulus package during a recession there is usually a...

1. The Federal Government distributed a recovery relief fund to all households with $600 for all...

The Federal Government distributed a recovery relief fund to all households with $600 for all individuals...

Suppose the government proposes austerity measures that induce a larger reduction in public goods. We are...